Leading African Gold-Producing Nations Moving To Protect Their Interests

Aug. 13—Ghana has inaugurated a new gold refinery in Accra aimed at enhancing the revenue earned by the government and curbing illegal smuggling. Already the second largest gold producer in Africa, Ghana wants to surpass its 2024 gold production target, with output expected between 4.3 and 4.5 million ounces.

The Royal Ghana Gold Refinery, a joint venture between Rosy Royal Minerals of India and the Bank of Ghana, has a capacity of processing 400 kilograms daily and to create 80-120 direct jobs and 500 indirect jobs. While it will initially source gold ore from small-scale and artisanal miners, it plans to obtain licenses to process gold from large-scale producers. “With the ability to refine our gold, we will be able to sell it at the appropriate price, enabling us to retain its economic value within our borders while creating numerous jobs for the youth,” said Vice President Mahamudu Bawumia at the opening ceremony.

Significant amount of output from artisanal miners (known locally as “galamsey”) has been smuggled outside the country..

The Bank of Ghana, which launched a gold purchase program in 2021 to build reserves and stabilize the currency, sees the refinery as crucial for diversifying foreign exchange reserves and reducing reliance on external borrowing, reported Sputnik Africa on Aug. 9.

In a similar move, Burkina Faso’s National Corporation of Artisans and Small Mine Operators (CONAPEM) announced a plan to formalize the extensive number of small mines which operate illegally and are involved in smuggling gold, proceeds of which have financed terrorism. “We have no control over gold mining sites, which can contribute to the financing of terrorism,” explained CONAPEM’s new President Potierozie Didier Dabire, Sputnik Africa quoted him as saying. Dabire pointed out that the country’s more than 800 “wild sites” for gold mining demands better supervision. “The organization’s main objective is to support operators and artisanal miners in the process of formalization and transition to semi-mechanized mines.”

The two countries are implementing a policy recommendation of the Afreximbank in an April report on the gold industry in Africa, made in light of rising prices. The report by Afreximbank Research, “The Ongoing Gold Price Rally: Macroeconomic Implications for African Producers,” explains, given that the gold price has increased by more than 21% between February and April, because of geopolitical concerns driving investors and central banks to increase gold holding as part of the de-dollarization process, leading African gold producers should take advantage of this development. They advised African gold producers to double down on illegal mining, which has been a major loss for the governments, and to increase their gold reserve holdings.

Africa accounts for a fifth of the world’s gold production. The four top African gold producers, measured in 2022 exports, are South Africa (exporting $22.7 billion), Ghana ($9.5 billion), Mali ($7.3 billion) and Burkina Faso ($6.7 billion).

Financial sources say that the central banks have of late been selling into the market to prevent what otherwise would be a dramatic rise in the gold price, which is now hovering below $2,500.00/ounce.  "They have been depressing the price of gold for decades now," said a Wall Street source, "to try to keep it from skyrocketing, and further destabilizied the rigged, and over-speculated financial markets. For example, one might have expected a sharp rise in the gold price, in the wake of all the volatility and downward pressure on the equity and bond markets. Flee to safety, right? But instead, there were first only modest increases and then declines. When thiings are unnatural in the not-so-free markets, always look to the central banks, led by the Fed and the Bank of England, as the people doing the manipulating, through third paries."

This and other sources point to another reason that the central banks and the financial powers behind them in this rotten global system, want to depress the gold price. The rise in gold prices strengthens the largest producers, most notably Russia and South Africa, who are key to the BRICS alliance, from whence the pressure is coming for as new global financial system, which would use gold as a reserve backing, much the way that the former Bretton Woods systems worked. The BRICS gold-backed trading currency, also backed by the strength of the world's largest productive economic power, the physical economy of China, as well as India and Brazil, who comprise the rest of the BRICS core, now augmented by other nations, including oil producer Iran, and perhaps Saudi Arabia, then gives strength and power to a new de-dollarized system, whose structures are not yet defined, but the process of "trade without dollars" is already well advanced.

"Eventually, you are going to have to regulate the price of gold, and end all speculative trade in it," said the source. "This may anger some of the narrow-minded gold bugs, who want to the price to float. But you cannot do that if you want to use gold, as backing for credit and trade, and to stabilize and settle current account balances, in some new International Development Bank based system, that would do away with the bankrupt system of the International Monetary Fund (IMF)  and the central banks, including the privately directed Federal Reserve. But this, while not as far off as some might think, is still a way away. So, the gold producers would do well, as the Africans are doing, to poroduce more of the metal and hang on to it, rather than let foreign mining and other interests steal their patrimony, as has been the case in the imperial past and the post-imperial "empire of the dollar"